HQ 220204: Bond requirement for instruments of international traffic

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                                       HQ 220204

                                    March 29, 1988

            CON-2-03 CO:R:C:E 220204

            CATEGORY: Bonds

            Ben L. Irvin, Esq.
            1330 Connecticut Avenue, N.W.
            Suite 200
            Washington, D.C. 20036

            RE:  Bond requirement for instruments of
                 international traffic

            Dear Mr. Irving:

                Your letter of February 24, 1988, requests a ruling on
            whether the actual user of an instrument of international
            traffic (IIT) must be the principal on the IIT bond.

            FACTS:

                A company imports woven polypropylene bags called flexible
            intermediate bulk containers.  It is stated that for a number
            of years the bags were classified under item 772.20, Tariff
            Schedules of the United States (TSUS), and free of duty under
            the Generalized System of Preferences (GSP).  Recently, Customs
            at a port of entry concluded that the proper classification of
            the bags was in item 385.53 rather than item 772.20.  This
            classification change, it is stated, caused the importer two
            immediate and serious problems.  First, GSP is not applicable
            to item 385.53 making the bags dutiable at the rate of 9.5
            percent ad valorem.  Second, item 385.53 is subject to textile
            restraints, and a textile visa under category 669P is required
            as a condition for entry.

                It is proposed that henceforth shipments of the woven
            polypropylene bags will be invoiced to the U.S. user or filler
            of the bags.  A bond on Customs Form 301, containing the
            conditions set forth in section 113.66, Customs Regulations (19
            CFR 113.66), and in the name of the U.S. user or filler of the
            bags, will be obtained and placed on file with Customs.  Thus,
            when the shipment arrives for Customs clearance, the invoice
            and the bond will both be in the name of the U.S. user or
            filler.  The invoice will contain a description of the bags and
            a statement that the bags are IITs.  Attached to the invoice
            will be a copy of the ruling designating the bags as IITs,
            Headquarters letter 109370, March 7, 1988.










                                         - 2 -

            ISSUE:

                Must the user or filler of woven polypropylene bags,
            designated as IITs, be the principal on the IIT bond.

            LAW AND ANALYSIS:

                Section 1322(a) of 19 U.S.C. provides in part that vehicles
            and other instruments of international traffic, of any class
            specified by the Secretary of the Treasury, shall be excepted
            from the application of the Customs laws to such extent and
            subject to such terms and conditions as may be prescribed in
            regulations or instructions of the Secretary of the Treasury;
            and that any articles admitted under the authority of section
            1322 and used otherwise than for a purpose expressed in section
            1322, or not exported in such time and manner as prescribed in
            the regulations or instructions, shall be forfeited to the
            United States.

                The applicable Customs regulation, section 10.41a (19 CFR
            10.41a) relates to articles in use or to be used in
            international traffic and that have been designated as IITs by
            the Commissioner of Customs.  If so designated, such
            instruments may be released without entry or the payment of
            duty, subject to the provisions of section 10.41a.

                Section 10.41a(c), Customs Regulations, (19 CFR 10.41a(c)),
            provides in part that the instruments of international traffic
            designated in section 10.41a(a) may be released only after the
            applicant for release has filed a bond on Customs Form 301,
            containing the bond conditions in section 113.66, Customs
            Regulations (19 CFR 113.66).

                Accordingly, the principal on the bond must be the
            applicant for release of the IIT.  If the filler of the bags is
            also the user of the bags in international traffic it may be
            the applicant for release and the principal on the IIT bond.

                HOLDING:

                The principal on the IIT bond must be the applicant for
            release of the holder or container designated as an IIT.

                                        Sincerely,


                                        John A. Durant
                                        Acting Director
                                        Commercial Rulings Division